Passive Income Nowhttp://passiveincomenow.net
Mon, 30 Oct 2017 18:48:14 +0000en-UShourly1https://wordpress.org/?v=4.8.4Travel Insurancehttp://passiveincomenow.net/travel-insurance/
http://passiveincomenow.net/travel-insurance/#respondWed, 04 Oct 2017 00:31:27 +0000http://passiveincomenow.net/?p=103Travel insurance is a policy that protects the insured against any unexpected event that may occur during your travels, or before if you are forced to cancel your journey. There are many policies to choose from, and each policy is unique in its own way. It is therefore important for you to do your own research before buying a policy.

Consider the following tips when looking for the best travel insurance cover:

Price should not be your point of interest

The affordability of the cover is a very important factor to consider, but it should not be your deciding factor. Like any other insurance cover, the most affordable policy is not essentially the best.

As mentioned above, there are many cover under travel insurance. It is important to ensure that the cover you are buying is right for you, regardless of the cost. A cheaper option may not cover all your expenses when you need it the most.

Before you make the decision of buying any cover, go through all the benefits that come with that cover. You should be able to understand what to expect in case anything happens. In addition, ask your provider about the process involved when making a claim and what is the maximum amount that they can pay.

Even after buying the policy, you will be given a certain amount of time to confirm whether the information written therein is what you agreed. If you don’t like what you see, it is advisable that you seek clarification or cancel the cover.

What kind of cover are you looking for?

The second thing to think about when looking for the best travel insurance is the type of cover that you are interested in. Given that there are many policies to choose from, it can be very difficult to make a decision on the cover that is right for you. The following tips might help you to make your decision:

Who is travelling?

Are you travelling alone, or with your family? The following options are preferred for persons travelling with their friends or loved ones:

Single parent family cover

Couples travel insurance – This policy is recommended for couples that use one address

Family holiday insurance – This policy is meant for two people who have at least one child. The maximum number of children accepted is four. It is important to note that the children must not be over 18 years of age, and should be living with you full time.

Couple and child cover – If you only have one child, then you should think about buying this cover. It’s only meant for two adults and one child.

It is important to note that a family cover may be considered to be invalid when the family members choose to travel independently. It can also be regarded as void if you allow your children to travel with someone else who is not included in the cover. If you are not living in the same house with your children, there is high possibility that they will not be included in your family cover.

Do you travel regularly?

The number of times that you travel abroad is also an important factor to consider when looking for the best travel insurance deal. For example, if you travel frequently abroad, there are two major types of policies that you should consider – multi trip insurance cover and the annual holiday travel insurance cover. This covers allow you to travel without even notifying your provider. So, it is wise to consider how frequent you travel abroad before making the decision of buying a policy. Of course, there are better covers for persons who don’t travel frequently.

Shop around

It is actually important to try to find some time to shop around and compare the policies offered by different companies. Like many other insurance covers, the features and the prices of a given policy will not be the same in all the providers. This will give you a good chance of finding the best travel insurance deal with the features and the price that suits you.

However, it is important to remember point number one, price should not be your deciding factor. The most important things to consider are the features and the benefits that come with that cover. Price alone cannot guarantee you that the policy you are about to buy is right for you.

You will have to do your own research, because it is important that you compare as many policies as you can. The good news is, if you find the cover that you were looking for, you will most likely save a lot of money in the long run.

Consider hiring an insurance broker

Let’s be honest, there are people who too busy to a point whereby they can’t find time to shop around and compare quotes from different companies. This doesn’t mean that you can’t find the travel insurance cover that you are looking for. You have the option of hiring a broker who is well versed with different types of policies, including the features and benefits that comes with them.

Brokers actually don’t cost as much as some people are meant to believe. People suffering from various medical conditions are highly advised to work with brokers. This is because insurance brokers have been in the industry for long and knows what types of policies are best for you. An existing medical condition might be a major problem when looking for the best travel insurance deal.

]]>http://passiveincomenow.net/travel-insurance/feed/0How You Can Go Broke When Making Millions of Dollarshttp://passiveincomenow.net/go-broke-when-making-millions/
http://passiveincomenow.net/go-broke-when-making-millions/#respondTue, 08 Aug 2017 02:28:50 +0000http://passiveincomenow.net/?p=78YES. It is very possible to go poor after a successful professional career where you making millions of dollars (per year sometimes).

I found a really interesting and rather scary article the other day on Professional Wrestler Ric Flair. Anyone that remotely followed prowrestling will know the name and the legend that surrounds Ric Flair. Flair has been around since the 70s and he still wrestles to this date.

The character of “Ric Flair” is played by Richard Fliehr. The character is sort of difficult to define if you haven’t seen it. In a nutshell, Ric Flair is (in his own words) a:

You can check out the article here: The Wrestler In Real Life. For now let’s get back to the whole point of the article. How did this man go from a highly lucrative career to being in debt and still working into his 60s?

How can you go broke when making millions? How can you be poor when you make more money than most people?

Horrible investment decisions.

This article goes over some of the horrible investment decisions that one can make. Everything is covered from life insurance to opening up a gym without knowing much about the industry. The truth is that often times the best investment is the investment that you don’t make. There’s nothing wrong with storing your fortunes in a high interest savings account.

Getting conned by close friends.

If you want to make a plethora of friends all you need to do is brag about how much money you have. At least that’s what it seems like.

The author of the article describes how Fliehr trusted individuals that he considered to be close friends with his savings. In the end he got screwed over a few times. It’s a shame to read about this because I still want to believe that you can trust your friends.

Unrealistic spending.

The simple formula for success in personal finance has been and always will be: spend less than you earn. There are many more principles that you can add to this. The point being is that if you spend more money than you have coming in, you’ll never be able to save anything.

Fliehr in this case decided that instead of trying to appreciate the money that he had coming in, he would spend way more money. He would buy things that he just couldn’t afford. An ex-wife of Fliehr mentions that on top of being in debt the couple would spend $5,500 per month on clothing and $2,000 on eating out. That’s a lot of cash to be blowing when you owe money.

Poor marriage choices.

Nobody gets married planning to get divorced. It just sort of happens. However, I’m assuming that most people that get into a marriage understanding that they can only be with one person. It seems to me from this article that Fliehr got into every marriage without any intention of being faithful.

I can’t judge his actions. I can comment on the fact that poor marriage choices or getting married when you’re not totally ready can lead to you going broke.

There you have it. A clear cut way to go broke after making millions of dollars in your life. I don’t mean to be completely facetious. I just wanted to share the interesting (and sad) points that I picked up from this piece.

On a more serious note, articles like this really make me sad. I don’t mean to pick on Fliehr because there are many horror stories about athletes that retire poor. This article just really hit home for me because I’ve always been a fan of his work.

Ask the readers: what do you think of these horror stories about celebrities that make a fortune and retire poor? What would you do in this situation?

]]>http://passiveincomenow.net/go-broke-when-making-millions/feed/0Evolution of making money onlinehttp://passiveincomenow.net/evolution-of-making-money-online/
http://passiveincomenow.net/evolution-of-making-money-online/#respondTue, 08 Aug 2017 02:26:37 +0000http://passiveincomenow.net/?p=76Start a website, pay someone to point thousands of links towards that website, place display advertising & affiliate links, and dollars start coming in; good old times. However, online money making has evolved and it isn’t the same as it used to be 6-7 years ago.

A lot has changed during the years. Millions of those who were earning passive income online through non-legit methods have gone out of business.
Here are some of the things that have changed when it comes to making

money online:
1. Search engine algorithms
Google released Panda and Penguin updates to find out low quality sites and penalize them. Low quality sites were those who were ranking based on unethical link-building practices, low-quality content in high volume and other similar techniques.

A lot of sites were penalized, and some were even removed completely from search engines. However, sites that were creating quality content and were authoritative based on mentions on the web and social media moved higher in the index.

What to do today: If you’re looking to make money online through a website. Make sure to create quality content and get links from reputable sources. For example, if you’re in the energy niche, you can create authoritative, informative and in-depth pieces on different topics.
You’ll find several different websites that offer quality information on topics like commerce energy. You can click here to access the information, and due to the availability of mobile browsers, you can also browse information for content ideas through your mobile.

2. Affiliate marketing
Affiliate marketing is another popular way of making online. What people used to do is create short 50-100 pieces of content and place 3-5 affiliate links in those pieces. This doesn’t work anymore, as search engines now have strict guidelines when it comes to affiliate links.

Several affiliate marketers were penalized for placing affiliate links while offering no value in terms of content. On the other hand, those who adapted managed to survive and they still continue to make good figures without making a lot of effort.

What to do today: If you’re planning to make money online through affiliate marketing, you’ll need to be careful. You also need to focus on the content you create. Search engines would be fine if you place 1 or 2 links in a 500 word article.

You also need to stay relevant to your niche. Don’t try to place links redirecting to an iPhone page if your website is about fashion. Staying relevant with affiliate links and creative quality, in-depth content is the way to go.

3. Social media
There were times when those trying to earn through social media would add millions of fans and followers through automated softwares and charge a good amount of money for their services. It’s still happening at the moment, but this form of earning has seen a decline.

Businesses and individuals demanding social media following are now more ‘aware’. They need real people on their accounts rather than thousands of inactive profiles.

What to do today: If you’re going to start social media marketing, make sure to only go for real, active social media followers on your client pages.
You can do this through networking on social media, leaving comments and following others. You can also invest some percentage of the client’s fee in official advertisement like Facebook ads or sponsored

]]>http://passiveincomenow.net/evolution-of-making-money-online/feed/0Do You Want to be a Landlord? Let’s Look at Every Cost Involvedhttp://passiveincomenow.net/do-you-want-to-be-a-landlord-lets-look-at-every-cost-involved/
http://passiveincomenow.net/do-you-want-to-be-a-landlord-lets-look-at-every-cost-involved/#respondTue, 08 Aug 2017 02:23:39 +0000http://passiveincomenow.net/?p=73Are you thinking about purchasing a rental property and becoming a landlord? Are you thinking that this is a great way to earn some passive income? Are you ready to become a landlord for the first time ever?
Before you make any decisions. Before you jump into buying your first rental property. Before you invest your hard earned money and precious time, you need to be aware of all of the costs that are involved with being a landlord.
This post is broken down into 3 distinct sections: the money you need to spend before you get a tenant in your rental property, the costs of having a tenant in your unit, and the fees when your tenant leaves the unit.

You need to buy the property.
Before you can rent out your rental property, you need to find it first. This means that you’re going to have to put down tens of thousands of dollars for the down payment that you need to obtain this place. This also means that you’re going to have to tie up a significant piece of your capital into this venture. This in turn leads to an opportunity cost. The opportunity cost means that you might miss out on other investment opportunities with so much of your capital tied up in your rental place.

Looking for the property.
There will be a time and money investment when it comes to looking for the property. You might not find the right property for a while. This will take up time and energy. You’ll spend many hours on reviewing different locations and communications. The amount of cost involved here all depends on how you value your time.

Real estate agent fees.
If you’re working with a real estate agent you’re going to have to pay your fees. The fees here vary on the agent and the price that you guys agree on in advance.

Lawyer fees.
You need a lawyer to go through the real estate contract and for the closing. This will easily cost you about a thousand dollars. You usually don’t pay this money up until the closing date/when you get your keys.
Property closing.
You’re going to have to pay the typical property closing fees with your rental place. This is usually set at a percentage rate depending on the city that you live in and the typical closing costs. Lots of new home owners totally forget to factor this cost in.

Maintenance work.
Unfortunately, a home doesn’t always come ready to live in. The property might need to be upgraded right at the beginning or over time as tenants take their toll on the place. I bought a brand new condo and many changes had to be made. The reality is that there will always be maintenance work that you need to do on a property. If you want to rent out a basement apartment or several units, you’re going to have to make some modifications to the property to ensure that it’s up to code and has enough exits.
The home that my friend lives in his college town has a fire exit. Due to the amount of tenants living in the home, the landlord had to install and extra fire exit from the basement.

Searching for a tenant.
You need to find a tenant. Depending on the location of your property and the market, the time it takes to find a tenant will vary. I put up an ad for my condo the other day and I received three tenant inquires by the time I woke up. I was fortunate enough to come to terms with the first potential tenant that came by to check out my place. It doesn’t always work out like this. This leads into my next point…

Down time.
What will you do if you can’t find a tenant for your rental property right away? You’re going to obviously be on the hook for all of the costs. For how long can you afford to pay for all of the bills? How long of a down time before you start deeply cutting into your savings

Alright so now you have a tenant and you’re ready to start collecting your monthly passive income. What costs are involved when you’re actually renting the property out and have a steady tenant?

Mortgage payments.
Your mortgage payments will usually be your greatest expense for your rental property. This can easily cost you about $1000 per month, until you finally pay your mortgage off. The greatest chunk of rent usually covers the mortgage expenses.

Property taxes.
You need to factor in your annual property taxes into the monthly rent that you’ll be charging. Property taxes vary depending on which area of the world that you live in. Property taxes are usually 1% or so of the value of your property.

Maintenance fees.
These can completely destroy your profits. The maintenance fees at my condo are at $215 per month and this doesn’t come with any special amenities. It’s unbelievable how high these fees can be in some new condo developments. These will easily chew into your profits. The worst part is that the condo fees can increase every year.

Property damage.
If anything breaks around the house on its own, it’s usually on you to take care of the repairs. Most tenants won’t repair something that they didn’t break. The costs here can range from zero to thousands of dollars depending on what breaks.

Now you have your property and you’re making money. What if the tenant decides to not re-sign or to run out on their lease? What new costs will you be facing?

Finding a new tenant.
Now you’re going to have to go through the whole process again of finding a new tenant. If you’re working with a property management firm, you might not incur any further expenses because your monthly fees should cover you. If you’re doing everything on your own, then you’re going to have to invest your time once again by trying to find a new tenant.

Fixing up the unit.
Depending on the tenant, you might have to fix up the unit a little bit. This could be something as simple as a paint job or re-modeling the washroom. There will be costs involved in fixing the place up.

Down time.
Down time once again becomes a cost with your rental place. The truth is that down time can cost you much more than you could ever anticipate. This might also lead to desperation. When you get desperate you’re not thinking straight. You might take an unqualified tenant or try to sell your unit. Please always keep down time in mind.

We’ve gone over every single cost when it comes to managing a rental property. Now we can finally answer the fundamental question here– can you still make money with being a landlord at the end of the day?
Yes you can. If the price of monthly rent that the tenant pays you covers all of the costs involved. It’s really that simple.

]]>http://passiveincomenow.net/do-you-want-to-be-a-landlord-lets-look-at-every-cost-involved/feed/0Are You Afraid to Use Debt For Your Business?http://passiveincomenow.net/are-you-afraid-to-use-debt-for-your-business/
http://passiveincomenow.net/are-you-afraid-to-use-debt-for-your-business/#respondTue, 08 Aug 2017 02:18:23 +0000http://passiveincomenow.net/?p=71Have you ever considered using debt as leverage for your new business? Have you thought about borrowing money to grow your business?

If you’re any kind of entrepreneur in the slightest you’ll eventually reach the point where you realize that you need to invest some capital into your business in order for it to grow. This investment can be something as simple as hiring much needed consulting services or as complex as trying to find a new office in town. Regardless of the situation, it’s never an easy decision to use debt to grow your business.

With that being said, let’s start the discussion surrounding the fear of using debt to grow your new business…

What are the other options for growing your business?

Is there any other way you can acquire this capital? There are times where all you really need to bring your business to the next level is more time/organic growth. Then there will be situations where you need to invest more man hours. And yes there will also be points where you need to invest money. I like to consider the option of more time and effort before I put money into something.

What’s the worst case scenario?

I always like to think about the worst case scenario when I feel stressed out about something. When it comes to borrowing money to grow you business this can be a bit scarier. The fear of losing your business completely or putting yourself into massive debt for your business can keep you up at night stressing. The thing is that stressing out won’t get you any where. You need to make a decision with all of the facts in mind. Going into debt sucks and so does putting your business entity out of commission. You must consider these thoughts, but you can’t let them consume you.

What’s the best case scenario?

We know that using debt to grow your business can ultimately put you into debt. What about the reverse? What if your decision to grow your business turns out to be a positive one? Your business can hit an all time record in profit and you could eventually quit your full-time job. I personally like to compare the best case to the worst case when it comes to investment decisions. Does the best case scenario far outweigh your fears?

How badly do you want to grow your business?

At the end of the day you must think about how badly you want to grow your business. Is it a side-business? Is this something you want to turn into a career down the road? When I first started blogging I really started to become addicted to it. I wanted to grow my blog so badly that I would do anything. I paid for blog consulting services and I took advice from anyone that was willing to share any tips with me. It all really depends on how badly you want to grow your side business. Some people either hate their current job so much or are so passionate about their business that they will do anything to make it grow. How bad do you want it?

]]>http://passiveincomenow.net/are-you-afraid-to-use-debt-for-your-business/feed/0Would You Still Work if You Won The Lottery?http://passiveincomenow.net/would-you-still-work-if-you-won-the-lottery/
http://passiveincomenow.net/would-you-still-work-if-you-won-the-lottery/#respondTue, 08 Aug 2017 02:16:14 +0000http://passiveincomenow.net/?p=69Imagine winning the lottery? Imagine all of the endless possibilities? If you win a few million bucks you can literally do anything that you’ve ever imagined doing. You can buy a new home. You can buy cars for your whole family. You can travel the world. You really wouldn’t have to work anymore. Your working life would be over. You would never have to worry about money ever again.

Sadly there’s a dark side to winning the lottery. I wrote about lottery winners that went broke in the past. The problem is that you go from poor to rich in such a short period of time. You get rich without putting in the effort or determination. You essentially skip the fun part. You miss the chase of money. You just instantly come into millions of dollars.

Would I still work if I won the lottery? Absolutely. I can’t imagine not working.

I would work on meaningful projects. I would find clever ways to invest some of my new fortune. I would attempt to give back to the community. I would create jobs. I would obviously party in a more extravagant manner. I wouldn’t just sit around though. I would definitely continue working.

]]>http://passiveincomenow.net/would-you-still-work-if-you-won-the-lottery/feed/0Three Quick Ways to Find Paying Clientshttp://passiveincomenow.net/three-quick-ways-to-find-paying-clients/
http://passiveincomenow.net/three-quick-ways-to-find-paying-clients/#respondTue, 08 Aug 2017 02:11:48 +0000http://passiveincomenow.net/?p=67Anyone that is currently a freelancer or has ever done any freelance work understands the importance of finding paying clients. Without paying clients there’s no business. If nobody pays you money for your services, you won’t be able to continue your freelancing work in the current field. This is why finding paying clients is highly critical as you look to branch off on your own.
One of my friends is a private guitar instructor. He has been playing the guitar for over a decade. He also studied classical guitar in college. Recently he has been on the pursuit for finding paying clients. The other day as we were talking I asked about how he finds paying clients. My friend shared three quick ways to find paying clients:
Online ads.

The power of the internet and social media is phenomenal. There are many ways you can advertise online. One of the newest methods is using Facebook to reach your target demographics. Another common strategy is Kijiji or any other online trading site like that. These simple online ads can go along way towards helping you find future clients. The most obvious benefit to using the internet to promote your services is that literally everyone is online these days. What are you waiting for?
Word of mouth.

If you do good things people will find out. This tiny blog received a mention from The Simple Dollar a few weeks ago. I find that we often underestimate the true worth of word of mouth. You never know who will be listening in and who’s paying attention to you. Word of mouth has done wonders for me with my blogging because usually all it takes is a little luck to get picked up by one of the big guys. The best way to take advantage of word of mouth is to always over-deliver on expectations. This way people can’t help but spread the word about you.

Community places.
Common community hang outs can really help you with reaching a more targeted audience. When I wanted to improve my golf game, I checked the board at the local golf club to see what the offers were like for private lessons. Advertising your services at the local community centre can help you land some local clients depending on your business offering

]]>http://passiveincomenow.net/three-quick-ways-to-find-paying-clients/feed/0The Paradox Of Choice For Passive Incomehttp://passiveincomenow.net/the-paradox-of-choice-for-passive-income/
http://passiveincomenow.net/the-paradox-of-choice-for-passive-income/#respondTue, 08 Aug 2017 02:04:10 +0000http://passiveincomenow.net/?p=63How does one decide which passive income stream to follow? It is already difficult enough to make up our minds considering the fact that we all likely have a steady/active source of income (full time work).

Whether you work full time, attend school full time, or run a family, you only have a minor fraction of your day to devote to your secondary income source. This time usually cuts into your sleep or time spent with loved ones. Therefore, a lot of though goes into which source of passive income we will decide to follow.

The Paradox of Choice- Why More is Less is an excellent book written by Barry Schwartz. I was going to do a full blown book review but I opted to try something else. I wanted to apply a few of the main concepts/theories to passive income and the decision making process involved.

New choices all of the time

Every time you go online you read about new ways of earning an income. You read about all of the different ways that internet entrepreneurs are making money (and lots of it!). You learn about emerging real estate markets. You learn about hot new stocks on the rise. There is a great wealth of information available on the internet that gives us about a million different passive income options.

Every day we are bombarded with more potential income earning sources. We have a difficult time establishing which income sources are truly important and which are merely interesting. Most of these new sources simply lead to information overload. Information overloads leads to us not making any decisions at all.

Missed opportunities for passive income

By running a blog you take time away from another passive income stream. Instead of writing for your blog you could be running an eBay store or managing real estate properties. Instead of investing massive amounts of money in real estate and closely watching the property, you could be focusing that energy towards writing an eBook on a profitable niche.

While trying to earn an income from blogging, I have seen many internet entrepreneurs start successful websites where they sell a service. Pat from Smart Passive Income wrote a few eBooks and did a few audio recordings that have been extremely profitable for him. These are all missed opportunities for the rest of us that are trying to earn an income through other sources.

Choice and Happiness

Do you want the stress that comes with investing a large amount of your savings into a passive income stream?

Are you willing to spend over 8 hours a day monitoring your blog?

Will you be happy with an income that fluctuates on a monthly or even weekly basis?

These are all choices and decisions that we make regarding our passive income that will ultimately affect our happiness.

]]>http://passiveincomenow.net/the-paradox-of-choice-for-passive-income/feed/0Why Does Everyone Want to Buy a Home Instead of Renting?http://passiveincomenow.net/should-you-buy-a-home/
http://passiveincomenow.net/should-you-buy-a-home/#respondTue, 08 Aug 2017 01:56:47 +0000http://passiveincomenow.net/?p=60I was talking with a friend of a friend the other day. He was just informed that his parents were moving out of town and that he would be on his own. At this point he decided that he wanted to move in with his long-term girlfriend. That’s cool. The only problem is that her family will be putting in about most of the money for the down-payment for the home mortgage. That’s a big problem in my opinion because you’ll always be in debt to your in-laws. I’m not sure that’s something that any young person wants.

Before I go off on a tangent, I really wanted to look at the idea of why everyone wants to buy a home instead of renting for the first few years.

Buying a home feels like the next logical move.

Buying your first home is a big move financially and emotionally. Yet for some reason, buying property is a move that we do without much thought at all. We just assume that we need to buy a place. We finish college, find a job, and then want to buy a place. It just feels right to buy a home in your 20s.

Renting is viewed as a waste of money.

I’m not sure why so many of us consider renting to be a waste of money. You’re paying for a roof over your head. Yet whenever I speak to a friend, they claim that they don’t want to rent because they don’t want to waste money. Little do these people realize that home ownership can at times be the biggest waste of money. Think of property taxes, maintenance fees, sometime breaks around the house, or mowing the lawn. There are also those home repairs that need to be made by contractors such as Allstate Roofing, that people overlook before buying a home.With renting you do not need to worry about taking care of those fixes.

Buying a home is seen as passive income.

When it comes to passive income, many of us feel that buying a home is a great strategy for generating extra money without much effort. This couldn’t be further from the truth. Do you know how much work goes into buying a home? A ton.

The only time that buying a home can be passive income is when you become a landlord. Even at this point you’re still going to have plenty of work. You could hire a property management firm or you could do everything on your own. Either way, it’s not going to be easy.

]]>http://passiveincomenow.net/should-you-buy-a-home/feed/0The Art of Screening Tenants Properly to Protect Your Huge Investmenthttp://passiveincomenow.net/screening-tenants-rental-property/
http://passiveincomenow.net/screening-tenants-rental-property/#respondTue, 08 Aug 2017 01:53:45 +0000http://passiveincomenow.net/?p=58A rental property is a huge investment. If you decide to go with this source of passive income you’re going to have to put in a massive amount of time into getting the property. You’re also going to have to invest a large chunk of your savings. To put it bluntly, your first rental property can be a make or break type deal as a young investor. All of the time and money that you invest into the rental property is going to turn it into a huge deal. You can find the perfect tenant and be a great landlord. On the flip side, you can flop and regret ever getting into real estate.

Screening tenants is really important. You want to protect this rental property that you spent so much time and money on getting your hands on.

How can you screen tenants properly to save a ton of money? What’s the art of screening tenants?

Check if the candidate has a verified job.

How’s the new tenant going to pay the rent to help you pay off the monthly mortgage of the property? You need to figure this out first. All applicants need a verified job. As much as I support students and entrepreneurs, the reality is that these two groups are going to have lean months where they have very little money coming in. You’re looking for a passive income opportunity and not a charity. You need to find someone with a steady job.

If they claim to be a successful entrepreneur you’re going to have to get some sort of proof of income and savings. Then you need to use your own discretion. Let me share two common scenarios that come to mind. A local business owner that runs a successful business is going to support the community and will likely be able to cover his rent. Some 20-something looking to start the next Google or Facebook, is going to need a reality check before they can even pay their rent in most cases. You want to do your due diligence so that you don’t get screwed over six months into the lease. Tenants have lots of rights these days. You don’t want to be stuck with someone that doesn’t pay their rent because they have no money.

How do you determine if the candidate has a verified and steady job?

Get their last pay stub.
Look at their income taxes.
Use common sense.
Once you determine that the candidate has a verified job and is going to be technically able to cover the rent payments, then you can move onto the next step.

Two references from previous landlords.

This can’t just be the previous landlord because that person might just want them out of the place. You want to get a reference from a previous landlord. You can also ask for personal references and professional references if you want to take things a bit further.

You might not always get this. The tenant might be a new college graduate or some 30 year old dude that finally got kicked out of his place by his retired parents. That’s okay. It’s not the end of the world. Use your common sense at this point. Some guy making good money and on his own for the first time is going to want to pay his rent so that he’s not forced back to his parents place.

Here’s another secret for references: every reference is going to be good.

Think about it. Who would give the number to someone that’s going to talk smack about them? Nobody! Don’t be fooled by the references. This is just done to prove that the tenant has anyone that can vouch for them.

You must meet everyone on the lease.

You need to meet everyone that’s going to be on the lease. I usually don’t recommend leasing to more than just one person. Couples are the obvious exception. If there’s going to be another person on the lease you need to meet them. You also want to do a credit check on both people. It doesn’t matter how busy the other person is.

Oh and if an extra girlfriend or boyfriend show up to the viewing and that person isn’t on the lease, that’s not a good sign. You need to meet everyone on the lease. These people are going to be living in your rental property. The place that you spent thousands of dollars on.

The tenants should have good credit.

Not everyone is going to have excellent credit. You should expect them to have good credit though. You want them to have a history of paying bills on time. On the other hand, the tenant might be a young professional that never got a credit card. You can’t really use that against them.

I won’t dig much deeper on the topic of credit because this is a project all about real estate. You can check out my post on what’s a good credit score?

Is there enough cash for the first and last month?

I was always told to collect the first and last month’s rent as a deposit. If the applicant doesn’t have this, then you might not want to sign the lease with them. Without anything to lose, the tenant can easily walk away from the property.

Absolutely no smoking in the unit.

Smoking is horrible for a rental property. You can’t discriminate against someone for being a smoker. Just make sure they understand that there should be no smoking whatsoever in the unit! They can smoke all they want outside or on the balcony.

No pets preferably.

Pets are an iffy one. You don’t want to deny someone because they have a fish or a cat that they’ve adored for the last five years. You also don’t want a pet to trash your place.